Key Points
- Microsoft has been briefly overtaken by Nvidia as the world’s wealthiest company, ahead of Apple.
- Both Microsoft and Nvidia made strategic investments in AI years ago.
- Despite a fall in share price, Microsoft is still second only to Nvidia.
- The tech industry was reshaped by the AI boom.
The ascent of Nvidia under CEO Jensen Huang has been a marvel of prescience. Recently, it became temporarily the world’s most valuable company — a position it took from Microsoft, which had earlier eclipsed Apple. This brief reign atop the global technology industry prompted spontaneous applause at a tech gathering in Copenhagen.
For now, Nvidia has slipped back to No. 2 after its share price fell. Its combined value stands at $3tn, behind Microsoft’s $3.4tn. What caused these tectonic shifts? Artificial intelligence (AI) and visionaries.
How Microsoft and Nvidia bet correctly to leapfrog Apple https://t.co/EjvSBalfgD
— Tig Williams (@TigWilliams) July 3, 2024
Early Investments in AI by Microsoft and Nvidia
Microsoft began its journey to the top with an investment in OpenAI — creator of the widely used AI chatbot ChatGPT — in 2019. This early move into artificial intelligence has paid off handsomely for the US company, establishing it as an AI-driven technology leader.
Nvidia’s CEO Jensen Huang similarly led his company into AI chip development long before generative applications surged in popularity. The Californian semiconductor maker’s shares have since rocketed on rising demand for machine learning capabilities.
Tech Landscape Shifts as Boom Hits
London Tech Week this year could easily have been renamed London AI Week; such was the prominence of artificial intelligence at Europe’s largest tech conference. The pervasive impact of AI was clear from every stand adorned with its name and each speech that mentioned it.
Anne Boden, founder of Starling Bank and one of fintech’s standout figures, summed up many attendees’ feelings when she said: “We thought we knew who the winners and losers were [in tech].
But with AI, we are throwing the dice again.” This reflects how the boundaries of innovation and competition are being redrawn by AI’s rapid spread across industries.
The buzz around AI was further evidenced at the Founders Forum. The invitation-only gathering of top entrepreneurs and investors carries a high level of confidentiality — but there was no hiding its central theme: AI. Attendees spent much time discussing what it could do and its implications, underscoring their belief in its transformational power.
AI Stocks Reality Check
But the AI euphoria comes with some caveats. A headline in the Financial Times spelled out one of them: “Most stocks hyped as winners from AI boom have fallen this year”.
More than half of Citigroup’s “AI winners basket” had lost value in 2024, according to the article. This serves as a reminder that while artificial intelligence holds great promise, markets can react unpredictably to it.
Microsoft and Nvidia’s strategic investments in AI have given them a temporary edge over Apple in the tech world. They saw the potential of artificial intelligence long before others did, which put them ahead of everyone else.
While nobody knows what will happen in the end because of these big risks taken by all major technology companies; one thing is clear – as long as there are still new developments being made around this area, it should be expected that there will always be changes taking place within such an industry.
